Fletcher in the News

It has never been easier to go cash-free, but for all the digital wallets, smartphone apps and (by now) old-fashioned plastic out there today, for many consumers, cash is still king…

…Cash is physical, fungible and anonymous – to a point. It may be ideal for small-dollar transactions or gift-giving, but for all its benefits, the costs of cash are highest not for banks, but for those who fall outside the mainstream banking system. That’s the conclusion of “The Cost of Cash,” the first of a four-part series on the costs and benefits of using cash worldwide. The first installment, which focuses on the United States, was published late last year and authored by Bhaskar Chakravorti, Senior Associate Dean of International Business & Finance at Tufts University’s Fletcher School, and Benjamin D. Mazzotta, a postdoctoral research fellow. The team also has studies forthcoming on the cost of cash in Egypt, India and Mexico.

Their research in the United States reveals essentially a two-tiered system in terms of the cost of access to cash, Mazzotta told Banker & Tradesman. Those costs of cash are measured in terms of the time and fees spent getting to that cash and in the efforts spent mitigating the risk of loss or theft. Unlike plastic, once that cash is gone, it’s gone…